U.S. Senators Seek New Oversight Framework for DeFi Platforms in CLARITY Bill

U.S. lawmakers have unveiled proposed changes to the CLARITY bill that would create a new class of crypto platforms labeled "decentralized finance trading protocols." The category would cover individuals or groups deemed to have direct or indirect control over a protocol's functions, operations, or consensus rules, and would require such communities or companies to register with the Commodity Futures Trading Commission (CFTC). Under the proposal, the CFTC and the Department of the Treasury would be tasked with writing rules that set a workable standard for who falls within the definition and what obligations apply. Backers say the aim is to draw a clearer line between projects that operate without oversight and platforms that present themselves as decentralized while still retaining control through mechanisms such as concentrated ownership of native tokens, a treasury, or other tools that steer development. The debate has previously stalled over whether developers, interface operators, and governance participants should face compliance requirements even if they do not hold customer funds. Sen. Cynthia Lummis said her amendment would address that uncertainty by assigning responsibility for customer funds on platforms to developers and communities. The updated language would also provide civil-liability protection for stablecoin issuers and exchanges that freeze assets when they suspect illegal activity by wallet owners. Without such a safeguard today, platforms and issuers can be sued and forced to unfreeze cryptocurrencies. Sen. Kirsten Gillibrand, a Democrat, said crypto platforms should ultimately be held to the same regulatory standards as banks. Lummis, a Republican, said she hopes the revisions will help win Democratic support ahead of a Sept. 15 procedural vote, when the Senate is set to take up the bill's original text in a first-reading equivalent. Advancing the legislation will require at least 60 votes; if that threshold is met, senators would then begin considering amendments, including those formally introduced by Lummis. Lummis said her version would preserve the bill's "ethical provision," which would bar government employees, officials, and their spouses from issuing or promoting digital assets or operating a crypto business. She also noted that two senators previously suggested adding a carve-out that would allow President Donald Trump to defer federal capital gains taxes on crypto sales, even as he reportedly earns billions in crypto-related business income.